Orlando Real Estate

Orlando Real Estate Sales Stay Hot

September 3rd, 2009 9:08 AM by David W. Welch

Sales for August topped the 2,000 mark for the third month in a row, while inventory dropped to around 16,400. The median price also dropped a bit to $129,000 as bank owned properties continue to make up about 50% of the closed sales. I did receive an approval on one of my short sales in Baldwin Park, and I am beginning to think that we may start to see banks moving on the short sales by the end of the year. There are two reasons why I think the short sale market may begin to change. First, The Fed's plans for purchasing mortgage backed securities end at the the end of the year. Right now those purchases keep the mortgage market liquid and keep those bad loans off the banks books. I do not know what The Fed's plan is regarding the purchases they have already made, but at some point they should have to go back to the banks. Second, the Financial Accounting Standards Board (FASB) is looking at requiring banks to mark to the market the value of their loan portfolio, much like corporations have to do now with securities. If that goes through, banks would have to value their loan portfolios at the market. They would have to account for pre-foreclosures / short sales on their balance sheets and income statements as an unrecognized loss. At this point, the banks are pretty much not being held accountable for their bad loans, but with The Fed actions coming to an end and the FASB looking at requirements forcing banks to value their loans at the market everything could change.